Obtaining the best, lowest-cost deal for Ohio taxpayers wasn’t even a consideration as a state agency violated contacting rules to award millions of dollars in overpriced, unbid contracts to three favored information-technology consultants, Ohio’s inspector general has concluded.

A report released Monday by Inspector General Randall J. Meyer confirmed a seven-month investigation by The Dispatch that found unbid, $200-plus-an-hour contracts were routed for years to certain consulting firms over the protest of Department of Administrative Services purchasing analysts.

The agency's information-technology office created "opportunities for abusive and potentially fraudulent activity" through wrongful conduct that included failing to comply with state purchasing requirements and providing shoddy oversight of its own management and state contractors, the report said.

A report by outside investigators hired by Meyer's office said the agency ducked "any consideration in obtaining (the) fair and best cost for the benefit" of taxpayers by handing unbid contracts to Columbus-based Advocate Solutions, which employed several former state Administrative Services IT officials, and Stonyhurst Consulting of Middleburg, Virginia.

The Dispatch found that Advocate was paid about $12 million in unbid work between 2011 and early this year while Stonyhurst received more than $3 million in the same period.

There was scant evidence justifying the no-bid contracts or state officials' assertions that the companies were uniquely qualified to provide consulting services to top Administrative Services IT officials, the third-party report said. At least some of the work could have been done at lower cost by other companies, the report said, but they were locked out by a lack of "fair, open and honest" contracting opportunities.

Meyer referred his report to the office of Auditor Dave Yost, which is conducting a separate investigation of IT contracting, and the Office of Budget and Management's internal audit office.

An Administrative Services spokesman declined comment on the findings of wrongdoing and rules violations. The office of Republican Gov. John Kasich also declined comment, deferring to the Administrative Services agency.

"Earlier this year we placed responsibility for procurement with purchasing specialists outside of the IT department and instituted new policies requiring a minimum of three quotes before purchasing certain IT products or services," said Administrative Services spokesman Tom Hoyt. "In addition, we have increased transparency on IT projects by providing legislators regular reports of state term schedule awards for state IT business."

The Dispatch reported on April 2 that Chief Information Officer Stuart Davis and other state officials disregarded employee warnings and state policy to award millions of dollars in no-bid consulting contracts to Advocate and Stonyhurst.

"Many of these IT contracts were routinely awarded without a competitive procurement process to the same companies and individuals year after year," the inspector general's report found. Meyer's office has signaled more investigative reports are pending.

The inspector general hired Procurement Integrity Consulting Services, a Florida-based company composed of former government investigators, to examine Administrative Services' information-technology contracting practices.

The company's report said the pricey unbid contracts given to Advocate and Stonyhurst were not sufficiently justified, lacked cost comparisons and showed no documented data about their performance. In fact, neither company won contracts this past summer when a competitive bidding process was used, the report said.

The inspector general asked Administrative Services to respond within 60 days on 13 recommendations issued by the office, including revamping state contracting policies to ensure fair and transparent contracting and other steps to ensure the integrity of state purchasing.

The Dispatch’s stories prompted the General Assembly to adopt a budget provision requiring Administrative Services to seek competitive bids on all technology contracts and submit them for approval to the Controlling Board. Kasich vetoed the measure.

Rep. Keith Faber, R-Celina, said Monday that he will ask lawmakers to override Kasich's veto. "This is getting ridiculous. They have to improve the way they do contracting for IT. It's not working well for the people of Ohio," Faber said.

In a statement, Meyer said he hired independent experts because he wanted fresh eyes to look at the IT contracting.

State Rep. Jack Cera, D-Bellaire, expressed alarm after The Dispatch's stories. “Today’s report confirms what many have known for quite some time: Powerful public officials at the highest levels of state government have misused the system and taxpayer dollars to benefit political insiders and friends. This is just the latest report of wrongdoing in what is quickly becoming a pattern of corrupt activity ... The scope of the investigation should reflect this and hold public officials accountable.”

Earlier this month, Meyer's office released an investigation accusing Davis of violating ethics laws when he solicited $37,000 from a state vendor to sponsor his speech at an information-technology conference in Cincinnati in 2013.

Davis solicited the money from Montreal-based CGI while “simultaneously engaged in approving contracts and contract amendments” for the company, according to the report. Meyer referred his findings to the Ohio Ethics Commission and the Franklin County and Columbus city prosecutors’ offices for consideration of potential charges.

rludlow@dispatch.com

@RandyLudlow

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.